Not very long ago, credit and debit (payment) card fraud was considered a cost of doing business. With carder forums and data breaches, the cost of payment card fraud has reached billions of dollars, and merchants, especially smaller ones, are being impacted in a negative manner. 

There seems to be a looming battle on the horizon over, who is going to pay for all the fraud. Recently, in light of the TJX breach, legislation was introduced to charge more of the costs off to merchants. 

Merchants have always been charged for a lot of fraud in the form of chargebacks. When I saw the proposed legislation, my first thought was how it would impact the smaller merchants, pretty harshly.

Additionally, merchants aren’t only becoming more alarmed by fraud, but also by a perception that current fee structures are unfair, and deceptive.

Interestingly enough, a lot of consumers feel the same way, also. 

Today, I read an interesting press release about a movement to adopt a “Merchants Bill of Rights.” 

Recently, supporters of this bill did a survey of merchants, where they discovered: 

  • Only 26 percent of participants believe they are being treated fairly by the debit/ credit/prepaid card processing industry. 
  • Only 32 percent understand unfair card processing practices and how they impact their business. 
  • Only 21 percent understand the rates, fees and surcharges they pay. 
  • Only 15 percent believe they are charged the same as larger businesses. 

The survey was sponsored by Heartland Payment Systems, who processes payment card transactions and payroll. 

Heartland’s CEO and Chairman, Bob Carr stated:

It’s clear that many owners of small and mid-sized businesses don’t understand the complexities of card acceptance. Yet, card acceptance is often one of the three largest expenses they incur. Business owners need to educate themselves so they can manage these costs. What they don’t know may be hurting their bottom line. 

According to the press release, the bill of rights promotes fairness and transparency in card processing by identifying 10 fundamental rights: 

The right to know the fee for every card transaction – and who’s charging it. 
The right to know the markup of Visa and MasterCard fee increases. 
The right to know all Visa and MasterCard fee reductions. 
The right to know all transaction middlemen. 
The right to know all surcharges and bill-backs. 
The right to a dedicated local service representative. 
The right to encrypted card numbers and secure transactions. 
The right to real-time fraud and transaction monitoring. 
The right to reasonable equipment costs. 
The right to live customer support 24/7/365. 

The effort has a home page, which can be viewed, here. 

The page has a video for merchants to see if their rights are being violated, here. 

The Association of Certified Fraud Examiners recognizes that small businesses suffer greater losses than larger ones do. I did a post on this subject, with the some tips on how to avoid becoming a victim, here. 

In January, I did a post about how both consumers and merchants are calling for some reforms: 

Congress needs to take a hard look at credit practices 

In this post, I mentioned the Merchant’s Payment Coalition, which is calling for greater oversight on some of this. Their page on unfair credit card fees can be viewed, here. 

Even if you aren’t a merchant, the truth is that these costs have to be passed off somewhere; otherwise merchants would go out of business. Who do you think ultimately pays for all this?

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